Investor sentiment was lifted as many companies in the U.S. reported better than expected earnings. Among the Fortune 500 companies that reported strong quarterly earnings were Johnson & Johnson, Goldman Sachs, UnitedHealth and Mattel.

Reports that Spain is getting closer to requesting a bailout from the ECB have boosted market sentiment. German resistance to a full Spanish aid package appears to be weakening as the door opens wider to a formal request by Spain for a credit line.

Market players sense that Spain will request a PCCL rather than an enhanced conditions credit line (ECCL). “The difference is that, unlike the ECCL, the PCCL only makes ex ante requests from the country demanding it and associates no corrective action as conditions for providing the funds,” Credit Agricole said in a note.

However, it is likely that the Spanish government is anxious to put off any bailout until after the regional elections in Galicia and Basque on Oct. 21. Also, the pressure on Spain to enter an aid program has been eased by the drop in government bond yields seen in the last couple of months.